Safeway, Tone Deaf to Stakeholders, Has a Miserable Week

Safeway had a nightmare of a week, and based on the social media firestorm, recent criticism of the supermarket chain will not stop anytime soon. The problem started a month ago when a butcher at the Del Rey Oaks Safeway in the Monterey Peninsula was suspended without pay for defending a pregnant woman who was beaten by her boyfriend in the store. Then, at last week’s annual shareholder meeting, the company’s general counsel decided an obnoxious joke, which some women could find offensive, was a hilarious way to start the day.

When your stock price has been on a downward trend the past five years, your competitors from Walmart to Whole Foods to Amazon are only becoming more fierce, and your customers are quick to assail your company over everything from customer service to ethics, you would think a company’s executives would listen and try to respond accordingly. Instead, Safeway is issuing the same tired public relations babble: and customers are having none of it. Stakeholder engagement has become stakeholder enragement.

Safeway’s PR headache started on April 21 when Ryan Young, a meat clerk, confronted Quyen Van Tran, who was kicking and beating his pregnant girlfriend. When Tran refused to stop his rampage, Young struck him. The local police chief sent a letter to the store manager that commended him for his actions. A customer who witnessed the scene said Young acted accordingly. Another manager at the store supported Young and said everything would be fine. But the following day, Young was suspended without pay. As his suspension enters its second month, the local union has said they have expedited the review. Meanwhile Young’s wife is five months pregnant and the suspension has put them under financial stress. Safeway has since issued this statement:

“There are two sides to every story, and we would ask that judgment be reserved. We will be relying on the video and other relevant evidence as well as statements of eyewitnesses and other information to make a final decision.”

Actually the story has a lot of sides, with almost no one siding with Safeway. Customers, former suppliers and ex-employees are responding in kind, and the reactions are not pretty. Calls to reinstate Ryan Young and compensate him for back wages are plastering Safeway’s Facebook page. Self-congratulatory comments about Safeway’s employee volunteering bring up comments about Young’s heroism. Another statement posted on Facebook about the investigation is only scoring more sneering comments in defense of Young. And when the company touted its new breakfast sandwich line, one heckler retorted:

I’d have a great day if you gave Ryan his job and full pay + bonus for defending a pregnant woman. AND an even better day if you put your executives on unpaid leave for insulting women.

Speaking of women, Safeway’s general counsel Robert Gordon started Safeway’s annual shareholder meeting last Wednesday with an off-color joke that could be funny depending on your political persuasion or in the politically incorrect safety of your own home . . . but probably was not the most tactful comment if you had at least a few women in the ballroom. The joke comparing a couple powerful women to pigs was also an awkward way to start a meeting when talking about how a company can enhance its public reputation and image. Never mind the fact that Secret Service jokes are getting old, or the stupidity of telling such a joke when it is going to live forever as a recording on your firm’s web site. Gordon did apologize, giving the standard “I’m sorry IF I offended anyone” line (which usually means “I’m sorry I was called out and not allowed to get away with my poor judgment.”).

So while one employee who took a noble course of action waits in limbo without pay, an executive has a public relations professional release a halfhearted apology and still scores a paycheck. A company has taken a month to resolve a situation that has a police report and videotape clearly outlying the incident. And that same C-level executive wanted to score some cheap humor instead of explaining to shareholders why the company’s stock is a crummy buy. Integrity and ethical behavior are critical pillars of corporate governance, but right now Safeway’s management is a laughingstock, even though a lot of angry customers and stockholders find nothing amusing in this grocery chain’s rather sad week.